Steve's note: The following article describes two important
studies (from Harvard and Berkeley) that impressively link income
inequality to many various social problems, like higher mortality rates,
crime, welfare, substance abuse and educational problems. It explains why
the growing inequality of the Reagan Years, described in detail on this
web site, played such a critical role in worsening our nation's social
problems. An extremely important read!

ECONOMIC INEQUALITY AND HEALTH

By Peter Montague

It seems obvious that poor people are more likely to be sick, and to
die at an earlier age, compared to rich people. Several recent studies
from the U.S. confirm that this is the case.[1,2,3,4]

What is not so obvious is that the health of the poor is harmed in
proportion to the size of the gap between rich and poor. It isn't the absolute
level of poverty that matters so much as the size of the gap between rich
and poor. In other words, "...what matters in determining mortality
and health in a society is less the overall wealth of that society and
more how evenly wealth is distributed. The more equally wealth is distributed
the better the health of that society," according to an editorial
in the BRITISH MEDICAL JOURNAL April 20th.[5] Two recent studies of the
U.S. indicate that this is so,[6,7] and they are not the first to make
the case.[8,9]

The two recent studies, published in April in the BRITISH MEDICAL JOURNAL,
examine all 50 states within the U.S. Each study defines a measure of income
inequality and compares it to various rates of disease and other social
problems. Both the studies -- one from Harvard and one from University
of California at Berkeley -- conclude that the greater the gap between
rich and poor, the greater the chances that people will be sick and die
young. It isn't the absolute level of wealth in a society that determines
health; it is the size of the gap between rich and poor. Let's look at
some of the details:

George Kaplan and his colleagues at Berkeley measured inequality in
the 50 states as the percentage of total household income received by the
less well off 50% of households.[6] It ranged from about 17% in Louisiana
and Mississippi to about 23% in Utah and New Hampshire. In other words,
by this measure, Utah and New Hampshire have the most EQUAL distribution
of income, while Louisiana and Mississippi have the most UNEQUAL distribution
of income.

This measure of income inequality was then compared to the age-adjusted
death rate for all causes of death, and a pattern emerged: the more unequal
the distribution of income, the greater the death rate. For example in
Louisiana and Mississippi the age-adjusted death rate is about 960 per
100,000 people, while in New Hampshire it is about 780 per 100,000 and
in Utah it is about 710 per 100,000 people. Adjusting these results for
average income in each state did not change the picture: in other words,
it is the gap between rich and poor, and not the average income in each
state, that best predicts the death rate in each state.

This measure of income inequality was also tested against other
social conditions besides health. States with greater inequality in the
distribution of income also had higher rates of unemployment, higher rates
of incarceration, a higher percentage of people receiving income assistance
and food stamps, and a greater percentage of people without medical insurance.
Again, the gap between rich and poor was the best predictor, not the average
income in the state.

Interestingly, states with greater inequality of income distribution
also spent less per person on education, had fewer books per person in
the schools, and had poorer educational performance, including worse reading
skills, worse math skills, and lower rates of completion of high school.

States with greater inequality of income also had a greater proportion
of babies born with low birth weight; higher rates of homicide; higher
rates of violent crime; a greater proportion of the population unable to
work because of disabilities; a higher proportion of the population using
tobacco; and a higher proportion of the population being sedentary (inactive).

Lastly, states with greater inequality of income had higher costs per-person
for medical care, and higher costs per person for police protection.

The Harvard researchers used a slightly different measure of inequality,
called the Robin Hood index.[10] The higher the Robin Hood index, the greater
the inequality in the distribution of income. The researchers calculated
the Robin Hood index for all 50 states and then examined its relationship
to various measures of health and well being.

They found that the Robin Hood index correlated with the overall age-adjusted
death rate. Each percentage point increase in the Robin Hood index was
associated with an increase in total mortality of 21.7 deaths per 100,000
population.

The Robin Hood index was also strongly associated with the infant mortality
(death) rate; with deaths from heart disease; with deaths from cancer;
and with deaths by homicide among both blacks and whites.

The Harvard team concludes that reducing inequality would bring important
health benefits. For example, if the Robin Hood index were reduced from
30% to 25% (about where it is in England), deaths from coronary heart disease
would be reduced by 25%.

These studies are important because they confirm work that has previously
found a relationship between income inequality and health, using data of
good quality from all 50 states.[11] Inequality in the distribution of
income and wealth[12] has been increasing in the U.S. for about 20 years.[13,14,15,16]
In 1977 the wealthiest 5% of Americans captured 16.8% of the nation's entire
income; by 1989 that same 5% was capturing 18.9%. During the 4-year Clinton
presidency the wealthiest 5% have increased their take of the total to
over 21%, "an unprecedented rate of increase," according to the
British ECONOMIST magazine.[17]

Inequality in the distribution of wealth in the U.S. is even greater
than the inequality in income. In 1983, the wealthiest 5% of Americans
owned 56% of all the wealth in the U.S.; by 1989, the same 5% had increased
their share of the pie to 62%.[16,pg.29]

These trends in inequality in the U.S. are accelerating as time passes.
We now know that these trends have real consequences for the health of
people and society. As a nation, we have traditionally thought it was acceptable
if the rich got richer, so long as the poor were minimally provided for.
These studies now reveal that such a situation is not acceptable. As the
gap grows between rich and poor, the health of the nation deteriorates,
the social fabric unravels, and the cost of maintaining community goes
up.

How does the gap between rich an poor harm the health of the poor?
Evidently, the psychological hardship of being low down on the social ladder
has detrimental effects on people, beyond whatever effects are produced
by the substandard housing, nutrition, air quality, recreational opportunities,
and medical care enjoyed by the poor.[18]

The growing gap between rich and poor has not been ordained by extraterrestrial
beings. It has been created by the policies of governments: taxation, training,
investment in children and their education, modernization of businesses,
transfer payments, minimum wages and health benefits, capital availability,
support for green industries, encouragement of labor unions, attention
to infrastructuire and technical assistance to entrepreneurs, among others.
In the U.S., government policies of the past 20 years have promoted, encouraged
and celebrated inequality. These are choices that we, as a society, have
made. Now one half of our society is afraid of the other half, and the
gap between us is expanding. Our health is not the only thing in danger.
They that sow the wind shall reap the whirlwind.

[6] George A. Kaplan and others, "Inequality in income and mortality
in the United States: analysis of mortality and potential pathways,"
BRITISH MEDICAL JOURNAL Vol. 312 (April 20, 1996), pgs. 999-1003.

[10] The Robin Hood index (RHI) is calculated by dividing the population
into 10 groups, richest to poorest. The RHI
calculation proceeds by first summing the percentage of income for
each 10% group whose percentage of available income exceeds 10% and then
subtracting the product of the number of 10% groups that meet this criterion
times 10%. Example: in Massachusetts in 1990, the top 10% received 29.93%
of income; the next lower 10% received 16.41% of all income; the next lower
10% received 13.09% of all income; the next lower 10% received 10.83% of
all income, and the remaining six 10% groups each received less than 10%
of income and are therefore ignored in the RHI calculation. The RHI index
for Massachusetts in 1990 is therefore calculated from the top four 10%
groups: (10.83% + 13.09% + 16.41% + 29.93%)-(4x10%) = 70.26%-40% = 30.26%.
See Appendix, pg. 1007, of Kennedy, cited above in note 7.

[11] The body of literature linking health to the gap between rich
and poor is reviewed in Richard G. Wilkinson, "Commentary: A reply
to Ken Judge: mistaken criticisms ignore overwhelming evidence," BRITISH
MEDICAL JOURNAL Vol. 311 (November 11, 1995), pgs. 1285-1287, which was
written as a response to Ken Judge, "Income distribution and life
expectancy: a critical appraisal," BRITISH MEDICAL JOURNAL Vol. 311
(November 11, 1995), pgs. 1282-1285.

[12] Wealth is the net worth of a household, calculated by adding up
the current value of all assets a household owns (bank accounts, stocks,
bonds, life insurance savings, mutual fund shares, houses, unincorporated
businesses, consumer durables such as cars and major appliances, and the
value of pension rights), then subtracting the value of all liabilities
(consumer debt, mortgage balances, and other outstanding debt).

[16] Edward N. Wolff, TOP HEAVY; A STUDY OF THE INCREASING INEQUALITY
OF WEALTH IN AMERICA (New York: Twentieth Century Fund, 1995). Although
this is a study of wealth inequality, chapter 6 deals with income inequality.

=======================Electronic Edition========================
RACHEL'S ENVIRONMENT & HEALTH WEEKLY #497
---June 6, 1996---
Environmental Research Foundation
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